Cuba reveals grand plan for laid-off government workers

On Monday, the Cuban Workers Federation announced plans that could lead to 1 million public sector job losses ranging from the flagging sugar industry to tourism, agriculture and Cuba’s flagship health program. Does this move mark the dawn of freedom?

That’s the question half a million Cuban state workers will be asking as they await layoff notices over the next six months and ponder how to find new jobs in private businesses that were illegal under former president Fidel Castro.

On Monday, the Cuban Workers Federation announced plans that could lead to 1 million public sector job losses ranging from the flagging sugar industry to tourism, agriculture and Cuba’s flagship health program.

It’s a major shift for President Raul Castro’s economic reforms, and a sign that his government is ready to cut its losses after decades of strict socialism, and two years of recession that followed disastrous hurricane damage.

“Our state cannot and should not continue maintaining companies, productive entities, services and budgeted sectors with bloated payrolls (and) losses that hurt the economy,” the workers federation said in a statement.

But it added that “job options will be increased and broadened” with new opportunities for non state jobs, including cooperative ventures, leasing land from the government for farming, and private enterprise like driving cabs, making bricks and piloting Havana’s ferries.

A 26-page Communist Party document, dated Aug. 24 and laid out like a PowerPoint presentation, was obtained Tuesday by The Associated Press. It explains what to look for when deciding whom to lay off. Those whose pay is not in line with their low productivity and those who lack discipline or are not interested in work will go first. It says that some dismissed workers should be offered alternative jobs within the public sector.

The document hints at higher wages for the best workers, but says, "It is not possible to reform salaries in the current situation."

The document says workers at the ministries of sugar, public health, tourism and agriculture will be let go first, with layoffs having already begun in July.

With so many of Cuba’s 11 million people dumped from jobs that have sustained them, although meagrely, for decades, the move raises questions about how the economy could absorb so many newly unemployed.

But experts say that the spectre of the former Soviet Union, where the collapse of communism left millions desperate and destitute, is unlikely to raise its head on the Caribbean island.

The government will cushion the shock with continued handouts and a gradual transition, said John Kirk of Dalhousie University, who has published several books on Cuba.

“People will still get subsidized food, free education up to post graduate level, free health care and pharmaceuticals,” he said. “Accommodation may not be good, but it’s better than many Latin American countries, and 80 per cent of people own their own homes. Those who rent will spend only 10 per cent of their incomes on housing.”

Hundreds of thousands of Cubans have also moved abroad, sending back money that supplements their relatives’ average $20 a month wage.

Monday’s announcement is a continuation of reforms that began when Raul Castro took over from his ailing brother in 2008. Since then, the fist of state monopoly has relaxed enough to allow 100,000 new farmers to lease land, and the ban on computers and cellphones was lifted. Some 600,000 people are already self-employed.

“It’s a homegrown Cuban experiment,” said Julia Sweig of the Council on Foreign Relations in Washington, who recently returned from a meeting with Fidel Castro. “They’ve studied the perils of rapid economic transition, and drawn some conclusions.”

The Castro government has been wary of allowing inequality to take root in Cuban society, an emotional legacy of the bandit capitalism of Fulgencio Batista’s dictatorship.

But for nearly two decades Cubans have been quietly edging into the tourist trade, opening restaurants in their own homes to earn some extra currency, and running small bed and breakfast businesses, in spite of intermittent crackdowns

Now, windows of opportunity are open wider for those with a will to work outside of the cradle-to-grave security of government employment. Reports say that plans for labour force restructuring include the issue of 250,000 new licences for self-employment, and 200,000 other non-state jobs will be created.

“A lot of the clunkiness in the economy will be removed,” said Robert Huish, a development studies professor at Dalhousie University.

But he added, there are hurdles ahead, including creation of new taxes in a country where personal income tax is unknown — and the ongoing effects of an American trade embargo that has curbed the Cuban economy during the past half century.

There are also fears that opening the economy could lead to the ravages as well as benefits of globalization.

“Its isolation has insulated it from some shocks,” said Huish. “Cuba has managed to maintain its social safety net. Homeless children are something you don’t see in Havana.”